Christmas comes early: Casual Loading Offset Regulation 2018 passed

  • 19 Dec 2018
Yesterday, in response to the decision in Workpac v Skene (the Workpac Decision),[1] the Government brought into effect the Fair Work Amendment (Casual Loading Offset) Regulation 2018 (the Regulation).
 
The Workpac Decision
 
The Workpac Decision caused shock waves around the country for employers, as the decision effectively found that in circumstances where employees had been classified and paid as a casual, but should have been classified as a permanent employee, they were entitled to be ‘back-paid’ for paid leave entitlements. Essentially, this resulted in ‘double dipping’, where employees could receive both a casual loading and the paid leave entitlements of permanent employees.
 
So what does the Regulation mean for employers?
 
The Regulation will allow employers to set off any amounts owed to incorrectly classified employees against the casual loading paid, without the need to amend employment agreements and other industrial instruments to permit the set off.
 
When does the Regulation apply?
 
Whilst the Regulation remains operative, the offset applies if the following criteria are satisfied:
 
  1. “a person is employed by an employer on the basis that the person is a casual employee; and
  2. the employer pays the person an amount (the loading amount) that is clearly identifiable as an amount paid to compensate the person for not having one or more relevant NES entitlements during a period (the employment period); and
  3. during all or some of the employment period, the person was in fact an employee other than a casual employee for the purposes of the National Employment Standards; and
  4. the person makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements.”
 
When is the Regulation operational?
 
The Regulation came into effect, 18 December 2018, and applies to employee employment periods that occurred before, on or after, that date.
 
Warning
 
Employers should note the introduction of the Regulation does not remove the obligation to pay leave entitlements to employees classified as casuals where the casual loading is not clearly identified or marked out (which was the case in the Workpac Decision) so it is important to ensure that this is clearly set out in correspondence, payslips, contracts or relevant industrial instruments.
 
Assistance
 
Visit the Federal Register of Legislation to read the Fair Work Amendment (Casual Loading Offset) Regulations 2018.
 
In the meantime if you employ casuals and would like advice on how to best protect your business we are here to help.

Post by Saasha Greeney and Sarah Jones

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